The combination of current assets and funds circulation form the working capital of the enterprise.
Current operating assets and funds circulation are closely linked. The current production facilities involved in the production process, being replaced by a new pair of raw materials, fuel, main and auxiliary materials. The value of current assets entirely transferred to the product of labor, and with it passes from the sphere of production in the sphere of circulation. Funds handling function in the sphere of circulation and are associated with the receipt of funds in the form of revenue.
The reasons for the enterprises of circulating assets and funds of the appeal:
1) the elements of working capital is continuously transferred from the sphere of production in the sphere of circulation and return to production;
2) the elements of working production backgrounds and funds treatment have the same character movement is circulation.
Circulation of working capital of the enterprise starts with the value of advances in cash on the acquisition of the assets of the company. The completion of the first stage is the production of finished goods (cash stage – production stage – the product stage – money stage).
Revolving funds perform the function of production, i.e. ensuring continuity of production.
Classification of working capital:
1) they serve the area:
- advances in current operating assets (raw materials, semi-finished products, auxiliary materials, fuel, work in progress, deferrals);
- advances of funds circulation (goods for resale goods shipped to customers, cash, receivables).
2) degree of planning:
- normalized;
- not normalized.
3) on formation sources:
private;
-debt,
- involved.
4) on the degree of liquidity:
- completely liquid current assets (cash),
- marketable current assets (short-term payables and short-term receivables),
- the slow-moving current assets (raw materials, materials, goods).
- illiquid current assets.
5) according to risk capital investment:
- working capital with a minimum risk of investment,
- working capital medium risk investments,
- working capital in high risk investments.
6) extent of use:
in stock
- in operation,
in conservation,
- located in the lease.
7) accessories:
private,
- rented
received under the lease agreement.